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please answer both. already posted them both and chegg has gotten them wrong. will give thumbs up Singh Development Co. is deciding whether to proceed
please answer both. already posted them both and chegg has gotten them wrong. will give thumbs up Singh Development Co. is deciding whether to proceed with Project X. The after-tax cost would be $9 million in Year 0 . There is a 50% chance that X would be hugely successful and would generate annual after-tax cash flows of $5 million per year during Years 1 , 2 , and 3 . However, there is a 50% chance that X would be less successful and would generate after-tax cash flows of only $1 million per year for the 3 years. If Project X is hugely successful, it would open the door to another investment, Project Y, which would require an after-tax outlay of $11 million at the end of Year 2 . Project Y would then be sold to another company netting $22 million after taxes at the end of Year 3 . Singh's WACC is 9%. a. If the company does not consider real options, what is Project X's expected NPV? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places. $ million b. What is X's expected NPV with the growth option? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places. $ million c. What is the value of the growth option? Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Neqative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places. $ million The Scampini Supplies Company recently purchased a new delivery truck. The new truck has an after-tax cost of $20,500, and it is expected to generate after-tax cash flows of $6,500 per year. The truck has a 5 -year expected life. The expected year-end abandonment values (after-tax salvage values) for he truck are given below. The company's WACC is 8%. a. What is the truck's optimal economic life? Round your answer to the nearest whole number, year(s) b. Would the introduction of abandonment values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project
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